Over 1.4 million members of Australian Retirement Trust (ART) will transition into a new investment strategy as the fund pivots to a high-growth default offering in the financial year 2024–25.
From 1 July 2024, the fund has announced it will invest members under the age of 50 into a MySuper investment strategy that is equivalent to the ART High Growth option.
The option, which sits in the SuperRatings SR50 Growth Index, is ART’s “strongest performing strategy over the past 10 years”, the fund said.
It holds almost 85 per cent in growth assets, which include Australian and international shares, unlisted assets, as well as alternatives such as infrastructure, property, and private equity. Around 15.25 per cent of the option is allocated to defensive assets.
It has returned roughly 9 per cent per annum over 10 years to 31 March 2024 and saw its second consecutive year of double-digit returns for FY23–24, delivering 11.3 per cent.
Meanwhile, the fund’s balanced option, too, has seen high single-digit returns of 9.9 per cent.
ART chief investment officer Ian Patrick credits strong international and Australian equities as primary drivers for this outperformance.
“We’ve seen robust and consistent outperformance across the board,” he said.
Looking ahead, Patrick observed a more “constructive” outlook in the current investment environment for delivering on real return targets for members after recent decades of low interest rates and a challenging outlook for long-term super returns.
“Of course nothing is certain, but there is some comfort to take from this,” he said.
The $260 billion fund previously unveiled a streamlined suite of choice investment options across superannuation and retirement products in March, which will now commence in the new financial year.
At the time, ART chief of retirement Kathy Vincent said the fund engaged with members, advisers, and employers in designing the suite.
“When we asked our members what they wanted most in a new investment menu, they told us performance, fees, sustainable investing, and the ability to choose the right level of risk were top priority – all of which remained front of mind when we worked to streamline these choice investment options,” Vincent said.
Commenting on the launch, ART CIO Patrick said the expanded suite will give members “freedom to awaken their super” by choosing from 15 options that “cover a broad range of objectives and investment time frames to meet their goals and life stages.”
Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”.
The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members.
Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financial year, but an economist has warned that the rally may be harder to sustain as key risks gather pace.
AustralianSuper has reported a 9.52 per cent return for its Balanced super option for the 2024–25 financial year, as markets delivered another year of strong performance despite the complex investing environment.